E-commerce is (still) booming. In China alone, more than half a billion shoppers purchased items online in 2017, and that number sits in the shadow of 2018’s growth.

In 2017, worldwide e-commerce totalled US$2.3 trillion. In 2018, Statista estimates global online retail sales will be US$2.8 trillion, and revenues are projected to grow to US$4.88 trillion by 2021. It’s a mind-bending time for consumerism.

Asia in the driver’s seat

China is the world’s most dominant e-commerce market, followed by the US, UK, Japan, with Germany rounding out the top five. China has such an enormous influence that “close to one-half of global B2C E-Commerce revenues are generated in the Asia Pacific region,” according to Research and Market’s Global B2C E-Commerce Market 2018 report.

Snapping at Asia’s heels are emerging markets in the Middle East, Africa, and Latin America, which are expected to deliver the highest growth rate through to 2021.

Disruption in distribution?

The logistics landscape that supports e-commerce is in the midst of some change. In the US, “the likes of Amazon (is) taking more control of their delivery chain,” shares Ellis Taylor, analyst at FlightGlobal. Amazon Prime is using their data and analytics capabilities to understand the volumes and geographies of deliveries, exploring the possibilities of striking out on their own from delivery centres to certain hot spots.

Back in Asia, Alibaba has already made a move to support the platform’s distribution by establishing a distribution centre in Malaysia. This centre works double time to protect Alibaba from Amazon’s recent march into South East Asia, while simultaneously supporting e-commerce originating in Asia and heading over to the US and up to Europe.

Back to the High Street

E-commerce expert Alex Misseri, Head of Digital Transformation and Revenues at Bluebell Group, advises luxury brands on their approach to e-commerce. He notes an interesting trend that many digitally native brands, those who have (to date) only transacted online, are opening physical High Street stores.

This is a stark contrast to the many traditional retail stores closing their High Street premises citing e-commerce as the reason. Misseri explains, “There are very few digitally native e-commerce brands that we speak to who have not yet opened a store.” As these brands mature, they realise an offline presence, and an omnichannel approach is an important part of their growth strategy.

“Offline companies have realised, many years ago, that they cannot do retail without online. Now, online companies also realise they cannot do without offline,” he comments.

For logistics, this presents an evolution. Misseri says, “E-commerce distributes from a warehouse or multiple warehouses. In omnichannel, you ship mostly from a physical store. This changes the game.”

A robotic last mile

An important element of the evolution of e-commerce is automated delivery by robots, which will revolutionise the last mile from a consumer and business point of view. “This is becoming a reality in China; some cities are piloting this, and there are more and more cities testing this across the world,” says Misseri.

It seems there is an increasing number of companies working on making robotic last mile a reality. McKinsey is predicting that autonomous vehicles will make up 85% of last-mile deliveries by 2025. This robotic future is not without its challenges. Some cities aren’t as open to a future of droid delivery – in December 2017, San Francisco banned delivery robots on the city’s sidewalks.

Vocal demands

Traditionally, we interact with the internet via the written word. When shopping, we type a word to search for items we need or desire. According to Misseri, this reliance on the written word is being challenged by new technologies that allow consumers to search with their voices and with images.

In the US, it is estimated that almost half the country’s households with broadband will have a voice assistant (such as Alexa) by 2022. That’s just 36 months from now. But what does this mean for e-commerce? Misseri explains that voice technology in the home has the potential to change shopper behaviour.

He explains, “Voice search will lead us to having our family supermarket baskets saved. Then we’ll talk to the machine and ask for the cheapest vendor or supermarket chain for those products. It will take, basically, one second to decide where to shop and it will be real time.”

Misseri also notes the developments in image search will also impact e-commerce and shopper behaviour, “Image recognition is becoming a game changer for e-commerce. Previously you typed ‘blue dress’ and got shown blue dresses. But now, if you take a picture, you’ll find exactly the dress you want.”

Taking this imagery a step further, he continues, “From this still image recognition, we’re moving to image recognition in videos. We’ll watch movies and the products in that movie – like sunglasses and bags – will be recognised.” The opportunities for e-commerce in this context are enormous.

A future of double-digit growth

According to Research and Market’s Global B2C E-Commerce Market 2018 report,  “between 2018 and 2021, retail E-commerce sales are expected to maintain a double-digit pace in percentage terms, with M-Commerce sales, transactions by mobile phone, projected to nearly double over the same time period”.


Cyber Monday, Black Friday and Singles Day

Cyber Monday sales hit $7.9 billion on 26 November, surpassing Adobe Analytics forecast of US$7.7bn. This represents a 19.7 percent increase on 2017’s figure of $6.6 billion.

Meanwhile, also in the US, Black Friday, on November 23, generated $6.2bn in online sales.

Earlier in November, Single’s Day smashed Alibaba’s record reaching $30.8 billion in sales during the 24-hour shopping event on November 11, up from the $25.3 billion reached in 2017.When sales opened on the Alibaba website they hit $1 billion in one minute and 25 seconds.